Category: r

The Government of Canada just gave Darren Entwhistle of Telus enormous incentive not to serve rural and remote areas. It is raising wholesale prices across the country to enhance “the phone companies’ ability to invest in building high-quality networks, particularly in rural and remote areas.”

Entwhistle is one of the sharpest CEOs in telecom. He’d be a fool to invest more than the minimum in rural areas That way, the government will continue to give the company boons like this. 

Where will the money go? 

In May 2019, TELUS announced its intention to target ongoing semi-annual dividend increases, with the annual increase in the range of 7 to 10 per cent from 2020 through to the end of 2022. This announcement further extends TELUS’ multi-year dividend growth program originally announced in May 2011 and extended for three additional years in each of May 2013 and May 2016. This program provides investors with ongoing clarity with respect to TELUS’ dividend growth model.

My experience is that 2/3rds of improved cashflow goes to shareholders, not investment. That will almost certainly be true here, Telecom worldwide is a slow growth business due to cost per bit falling more than demand increases. If raising dividends is a priority, that’s where the money will go.

Telcos worldwide are holding back on rural coverage in order to get subsidies and government boons like this. 

Canada has long had superior networks in the cities and terrible rural coverage.

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Possible Chancellor acts as if Ericsson and Infineon don’t exist

“Norbert Röttgen, CDU politician with aspirations for the party chairmanship and the chancellorship,” writes Achim Sawall says, “European companies were not allowed to roll out 5G in China … Beijing would never even think of opening its 5G network to foreign providers.”

China Mobile and China Telecom/Unicom are Ericsson’s largest customers for 5G, I believe. Sawall adds, “The Europeans received over 40 percent of the core network orders from China Mobile.” This is widely reported and the German language press called Sawall on his error. 

He refuses to admit his mistake, like a Washington politician. (All parties.) It’s highly likely that “confirmation bias” makes it impossible for him to see facts in front of his face.

Around a decade ago, China allocated 10% of its telecom market to each of Alcatel, Ericsson, and Nokia, Alcatel CTO Marcus Weldon mentioned at the Brooklyn 5G conference. The Nokia purchase of Alcatel had been announced. Marcus said he wasn’t sure whether Alcatel’s share of the Chinese market would be added to Nokia’s. 

The Chinese allocated nearly a third of their market to European companies under threat of a ban on Huawei. China and Europe came to an agreement on industrial policy.

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I was a member of this group, which was led by exceptionally able and gracious engineers. There is an enormous amount of misinformation from people who haven’t read the primary documents. This isn’t about Chinese control, and I expect CNET and FT will soon correct the errors in their articles. It’s about telcos wanting control, to guarantee low latency/QoS and charge more. See the list below.

Putting it in the middle of the US China war will alienate those needed to prevent it being approved, especially the Europeans.  

I think New-IP was a mistake. I was actually on the ITU Focus Group 2030 where it was presented. Among those who approved the final document were

Mehmet Toy, Verizon
Alexey Borodin, Rostelecom
Yuan Zhang, China Telecom
Yutaka Miyake, KDDI Research (Japan’s #2)
Dong-Hi Sim, SK Telecom (Korea’s #1)
Sundeep Bhandari, NPL​

Actually, nearly all the large telcos, including Deutsche Telecom, Vodafone, and British Telecom, support this kind of control. (Deterministic Networking, also called Non-IP at ETSI, the European Standards group.)

Here’s the key document.  I will have more later. Meanwhile, email daveb@dslprime.com for details.

David McCabe in the NY Times reported a 67-page official Google filing claiming

it does not control enough of the industry … 
It has not built its system to give its own services an advantage …
They denied that the company’s software gave it an inappropriate advantage… 

Until Google presented these facts, investors (and just about everyone else) assumed that in fact Google did have strong market power. It was fined almost US$2 billion by the EU and the US Justice Department is likely to file an antitrust suit shortly, So are the state Attorney-Generals and possibly the UK.

The $1.067 trillion dollar market cap represented a 32:1 price to earnings ratio. As investors discovered they were mistaken about Google market power, the stock fell over $200 billion, although the P/E ratio remained above the 22:1 average of the Dow. 

(The stock price effect here is pure satire. Everyone knows Google lawyers were doing what American lawyers usually do, make claims on behalf of the client that are not true. Jennie laughed out loud when I told here what Google claimed.)

The remarkable rise of Reliance Jio, to 383 million 4G users in four years, has brought India to the #2 position in the world Internet. Bharti has 143 million broadband subs and Vodaphone 118 million. (Trai data).Some people still have two sims but that’s become less important as caps are more generous and other charges approaching unlimited.

The U.S. population is 329 million. Western Europe is 222 million.  All Europe, minus Russia is under 600 million. India’s Internet growth is slowing but still substantial.  It will be several years before India, like China, has more Internet users than the U.S.

One consequence is that Internet institutions, like ICANN and 3GPP, are not appropriate to lead if they remain dominated by the U.S. and Europe. Some are uncomfortable with the UN/ITU, but unless existing institutions change, what other choice do we have?

The Internet is for everyone, no matter their place of birth or skin color.   

Sorry, Paul McAleese, Shaw’s cable network doesn’t match the capabilities of the Bell or Telus fibre to the home. That you offer a gigabit download to 99% of your customers is a great advance, worth trumpeting. It’s especially welcome where the telco hasn’t upgraded to fibre. But coaxial cable is not fibre; calling it fibre+ is simply false advertising.

Shaw’s upstream is “up to 25 Mbps.” Where Telus has fiber to the home, the upstream can go up to 940 Mbps. Neither company releases actual speeds, but I can tell by the network design what customers can expect. Shaw customers will get 20 Mbps upstream at least 90% of the time. Telus fibre customers will get 400 Mbps upstream at least 90% of the time. (Almost all networks are shared, but a decently designed network rarely see serious degradation. All the Canadian networks are well-designed.)

Telus took Shaw to court on the misleading claim. In the U.S., advertisers are allowed some “puffery,” so I don’t know what the court will decide. Shaw is defending vigorously, mostly by confusing the issue with irrelevant technical datapoints. It would have been smarter to concede the semantics and point to the facts of upgraded cable – including that it’s available in many locations where the telcos don’t offer fibre.

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I’m sure Vint Cerf – and the vast majority of Internet architects – remain certain that TCP/IP with minor improvements is the right way forward. But the European and Chinese telcos, backed by their suppliers, want a replacement called “New IP Networking.” ETSI, the very powerful European standards group, calls it “non-IP.:They claim, as you can read below, “A fundamental change is needed.” Deutsche Telecom and suppliers are key proponents.  

Update July 20: 

Current status of deterministic networking:

• IETF RFC moving forward with support from Cisco, Ericsson, and Huawei
• ETSI Special committee formed to move Non-IP forward
• ITU Focus Group 2030 included it in final architecture, likely to be rubber stamped by Study Group 5. US may make noise that will lead to same result with slightly toned down wording.
• Internet Society Opinion piece but no active engagement visible

Highly likely result, unless something dramatic is done: will replace TCP-IP over 5-15 years in favor of telco system. End update

Since the 1980’s the telcos in the U.S. have been fighting to control the Internet, a war described as Bellheads vs Netheads. (Ask Vint Cerf or Dave Farber about this or “protocol wars.”) The telcos are back big time, with proposals called “Deterministic Networking” (IETF, Ericsson, Cisco) New IP (ITU, China,) and Non-IP (ETSI, Deutsche Telekom, France Telecom.)

Telcos have an enormous advantage because they control the physical network. They are businesses dedicated to making money; of course they would like to erect a “tollbooth on the Internet.” The problem they face is that Internet connectivity is very cheap to deliver. The local and long-distance phone networks were enormously profitable. 

The telcos continue to be among the most profitable companies on Earth. Verizon’s net income has averaged over US$20 billion the last three years. But they are not providing investors the promised increased profits.

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 The Bellhead vs Nethead war is back with a vengeance. The European standards committee ETSI launched a new “Group on NON-IP Networking.” The telcos want to own the new 5G services. It has very strong support from the European telcos for major changes in IP networking. Those who remember the bellhead vs nethead wars will recognize what is going on.

The telcos – again – want strong control and quality of service, claiming it will be much more efficient. I believe Vint, David Isenberg, and many on this list discredited that argument 20 years ago, but it’s back with a vengeance.

China Mobile at the ITU made similar suggestions under the meme “New IP.”  I don’t think that anyone would be surprised the Chinese government is strongly supporting central control. Some uninformed reporters think this is about China trying to take control of the Internet and restrict freedom of speech in China. That’s nonsense; China already has the tools for censorship domestically and doesn’t need help from the ITU.

This is a telco versus the net battle, with the net advocates almost invisible. Traditional allies, like Google, are now so big they are conflicted.

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My analysis of U.S. telecom in 2020 & 2021 is dominated by the power of the T-Mobile build at 2.5 GHz.Verizon added $billion to keep up. David Evans and Jeff Eisenach included it in T-Mobile merger filings long before I separately came to the conclusion.

Opening 1200 MHz at 6 GHz for Wi-Fi will be one of the most important policy moves of the new decade. It took smarts and courage.

Pai refuses Free Press dumb idea TV stations should censor Trump 

Modi’s Gov refuses telco demand to raise and fix prices 

Germany, UK hold some 3.5 GHz spectrum for non-telco users

I can respect those who don’t share my progressive politics. Send me suggestions.

Randall Stephenson testified AT&T would add 7,000 jobs if Trump’s tax cut passed, worth $billions to them. Instead, he has cut 37,000 positions. Randall’s going away, but his successor John Stankey is committing to even more cuts. 

Almost everyone ignored the 2016 company plan to shed 80,000 positions, although my primary source was a top company executive to the NY Times. That’s a cruel, heartless cutback, possibly the largest since Elisha Gray and Alexander Graham Bell invented the telephone.

It’s probably a good strategy for shareholders, however. Many other telcos are losing fortunes trying to grow in a low growth industry. Much of the 5G hype comes from Nokia & Ericsson trying to persuade telcos to invest in products unlikely to pay off. Until the DirecTV and Warner purchases, AT&T was avoiding stupid investments.

AT&T’s shareholders have been hit by the $20-30 billion dollar overpayment for the TV companies. Randall is a financial wizard and has long obscured AT&T’s underlying business. It now is borrowing money to raise the dividend and buy back stock. Top analyst Craig Moffett has a very rare sell on the stock.

America is a very cruel country to anyone over 40 who loses a job.

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Tim Berners-Lee, over 10,000 at https://savedotorg.org/#add-org, slews of reporters, 3 ISOC Chapters and almost all well-informed independents are strongly opposed to the deal. The Internet Society just revealed it would get 1.13 Billion from very rich US investors for .org. That is enough money that honorable people have decided the damage to the Internet from the deal should be overridden. The deal will die if Pennsylvania or ICANN blocks or even delays.

If I were on the board, I might have voted for the deal. I’ve been among the most skeptical, partly because the amount and many other key details were totally secret. I would have demanded much more information and public discussion. 

I’m strongly advocating ISOC now take extraordinary steps to heal the rift with the chapters and restore the public perception of ISOC. 

“The Internet Governance Forum does need to evolve,” ICANN & ISOC-NY board member Avri Doria emails. “Speaking personally, I do not believe the IGF would disappear. If something were to happen, or if in the future it was not renewed by the UN General Assembly, then it could be recreated in a bottom-up manner as an international place to bring the various groups together. I also said that I considered the National and Regional Initiative one of the greatest outcomes of the IGF because they brought “Internet Governance” to the national and regional level.” 

The most common criticism of the IGF is that all it does is talk, talk, talk. That’s valuable, but many hope for IGF to have direct results. Monika Ermert, the best-informed commentator on “Internet Governance,” writes, “In Berlin, the hosts want to work hard to lead the IGF out of the crisis, which has been around for a few years because it only debates and does not act. … Die Machtlosigkeit ist dabei ein Geburtsfehler.” Ermert describes a highly chaotic program.

From the beginning, governments did not want to give away power. I’ve reported that the non-government participants have come overwhelmingly from the US and allies, as well as some others in general agreement. The non-government attendees rarely spoke from the point of view of the global south, which now represents the strong majority of Internet users. Two-thirds of the world want a more internationally representative group in charge, presumably the ITU. 

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